Plea to relieve debt by capping interest

An anti-debt coalition is pressing the government to include a cap
on interest rates in the Consumer Credit Bill, which received its
second reading in parliament last week.

Debt on our Doorstep, whose members include Church Action on
Poverty, Oxfam and the YMCA, said the bill, in its current form,
would do little to protect low-income households from rapacious
lenders.

It said some lenders charged the poorest families interest rates of
more than 350 per cent and made more than £3bn from charging
borrowers who defaulted on credit terms. It added that rate
ceilings were common in the rest of Europe.

Alan Thornton, campaigns and media officer for Church Action on
Poverty, said: “The best unfairness test is an interest rate cap.
But if
the government will not do that then it could look at the amount of
default charges a lender can charge, the terms of the loan and the
repayment period.”